4 Tips For Selling a Business With a Lease

A long-term lease agreement adds another layer of complexity when selling a business. Ultimately, you need to determine if the lease will transfer and how it will impact a buyer. Here are four tips for selling a business with a lease.

4 Items To Consider When Selling a Business With a Lease

Preparation is key in any business sale, or else you risk losing a buyer or even leaving money on the table. If you are selling your business soon, here is how to prepare if you have a lease!
commercial lease papers

1. The Terms and Type of Lease

A thorough examination of your lease is crucial to ensuring a successful transfer of ownership. You’ll need to determine if you have the right to transfer the lease to the buyer. This is especially important if the buyer plans to operate under a new entity. If you don’t have the right to transfer the lease, find out if you can sublet it. You’ll also want to take note of other key details like the time remaining on the contract, options to renew, and other important terms or clauses.

2. How It Will Affect the Buyer

As in any business transaction, putting yourself in potential buyers‘ shoes is important, as it will help you assess the attractiveness of your business. However, when selling a business with a lease, there are additional costs and stipulations you should be aware of that might impact interest. Some of these factors include:

  • Lease terms and conditions
  • Restrictions within the contract
  • Need for security deposit
  • Length of time to approve the transfer
  • Buyer’s rent-worthiness demonstrated through financial statements
  • Option to renew the lease

3. Your Landlord’s Approval is Key

Having a good relationship with the landlord of your business is essential because they play a critical role in the lease assignment process. Typically, this process involves obtaining written consent from the landlord, conducting due diligence on the potential buyer, and ensuring the new owner assumes all responsibilities and liabilities of the lease. You’ll want to familiarize yourself with the specific steps of this process for your unique situation in advance.

4. Working With a Business Broker

All business transactions have various requirements, which can be difficult to navigate. The best way to ensure a smooth transaction is to work with a business broker. They have the expertise and industry knowledge needed to get you to a profitable transition.

Are you ready to get started on the path toward a successful sale? Sunbelt Business Brokers has a professional team of experts to assist you through every step of the sale process. From determining deal structures, valuing your business, responding to buyers, and more, our dealmakers will do what it takes to help you achieve your goals. Find a location near you today to get in touch with your local office.

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